Thursday, January 22, 2009

Earnings Gap - Apple Inc. (Public, NASDAQ:AAPL); Potash Corp./Saskatchewan (USA) (Public, NYSE:POT)

AAPL and POT were the 2 earnings gaps that I was focused on this morning. Both had huge earnings beats and both guided lower. POT gapped lower and squeezed vertically making it hard to get it. Luckily it paused and briefly consolidated just above the $70.00 level, . My preliminary target was $74.00 pivot point level. I was going to swing the second half but decided to bail EOD because the trading day was so all over the place, I'm not sure what to expect going into tomorrow.

AAPL gapped wide despite the negative opening market sentiment. I place my fibs from the ORH to the early pivot low and entered long as price paused at the cusp of the R-zone. Price retests and holds support of the ORH on a closing basis and easily reaches the next fib. level.

Price retraced and found support at the base of the R-zone. The second test of this level gave me confidence to enter a second time.

Keeping both of these names on the focus list for tomorrow along with a couple of other Canadian names mentioned in the HCPG newsletter tonight.

MS has retraced 62% of the January slide in just two days. The trendline is steep and momentum declining on today's thrust, but a good name, along with other broker dealers (GS and JPM) to keep on the WL near-term. Some good charts here.

9 comments:

Rick said...

Didn't POT feel overbought? 70 is a very strong resistance level.

Jamie said...

Rick,

$70 and $74 are pivot points. I studied the chart last night and felt that a break of $70.00 would go to $74.00. Bullish triangle on the daily if it breaks $74.00.

Earnings beat was $0.28. Guidance was bad, but investors didn't seem to care, hence the squeeze. My entry $70.40 was in the BO zone. I'm not giving it a long leash. Outside 1 min. bar is the stop. The expectation is that price will move quickly higher so that I can profit from the early momentum.

Rick said...

It was a good trade obviously--I think I just don't understand how the BO zone is derived.

anarco said...

Hey Jamie~
Very nice trade on AAPL! I also entered AAPL on the 4/5, but I had to scratch because it got stuck around $89. Probably the 5min chart was not the right time frame to trade that one.
Thanks.

Jamie said...

Rick,

It's the congestion zone around the $70.00 pivot when I look at the wide range 15 min. chart.

Jamie said...

Anarco,

I'm using the 1 minute early pivot high/low to get in on the opening momentum. So far it has been very successful as long as the focus list is really short 2-4 stocks.

Rick said...

Thanks Jamie. Good decision not to hold POT overnight!

Jamie said...

Thanks Rick,

POT paid off nicely today. Hope you were in it.

Rick said...

I'm kicking myself for being on the wrong side of the market today, wasting my time shorting WYE. Once the gap filled it looked like we would just roll over.